Rep. Hensarling Touts "Progressivity" Of Regressive GOP Tax Plan

November 22, 2011 11:35 am ET —
Matt Finkelstein

After the official collapse of the super committee on debt
reduction, Republicans are in full attack mode, blaming the fruitless culmination
of the bipartisan talks on Democrats and President Obama. Today, the GOP
super committee co-chair, Rep. Jeb Hensarling (TX), made his case on the
Wall Street Journal op-ed page. In a
column titled "Why
the Super Committee Failed," Hensarling complains that Republicans budged
on taxes, but Democrats would not accept anything other than a "massive tax
increase."

Republicans
were willing to agree to additional tax revenue, but only in the context of
fundamental pro-growth tax reform that would broaden the base, lower rates, and
maintain current levels of progressivity. [...]

Unfortunately, the committee's challenge was made
more difficult by President Obama. Since the committee was formed, he has
demanded more stimulus spending and issued a veto threat against any proposed
committee solution to the spending problem that was not coupled with a massive
tax increase.

The remarkable part of Hensarling's argument is his claim
that the GOP offer, crafted by Sen. Pat Toomey (R-PA), preserves "current
levels of progressivity" in the tax system. It's not often that conservative
leaders tout progressive taxation — and, in this case, Hensarling seems
confused about the concept.

In reality, the GOP proposed to make
some of the most
regressive elements of the Bush tax cuts permanent, while actually lowering the top individual tax rate
from 35 to 28 percent.
"In contrast," according to the Center on Budget and Policy Priorities,"
taxpayers with income below $200,000 would see their tax bills rise, on average, compared to current
policies."

[T]he Republican proposal would significantly
shift tax burdens from high-income to lower- and middle-income taxpayers. High-income
taxpayers would benefit enormously from the proposed cut in tax rates, while
lower- and middle-income taxpayers would suffer disproportionately from the
proposed reductions in tax expenditures, since the plan shields the main tax expenditure for the highest-income
Americans - the highly preferential treatment of capital gains and dividend
income. [...]

In
contrast, taxpayers with incomes below $200,000 would see their tax bills rise, on average, compared to current policies. These
additional taxes on lower- and middle-income Americans would come on top of the
effects of the nearly $900 billion in spending cuts over ten years under the
Republican plan, which would fall disproportionately on them because they are
more dependent on Medicare, Medicaid, and other programs slated for cuts than
are higher-income Americans.

So the GOP's grand offer shifted the burden from the rich to everyone
else: That's the definition of regressive. Hensarling is just days removed from
suggesting he opposed "any penny" in new revenues, so it's difficult to take
his tax argument seriously. Nevertheless, he either doesn't understand the
concept of "progressivity" or is blatantly lying, which points to the real
reason the super committee failed: Republicans chose dishonest
ideologues to represent them, poisoning the process from the very beginning.